Aslina Wines, an independent winemaker located among the rolling vineyards of Stellenbosch, counts a large generator among its most valuable inventory. It relied on the machine to stay up and running during the worst of South Africa\u2019s power cuts, which affected the country 332 days last year. <\/p>\n\n\n\n
The vintner was lucky. As the blackouts grew increasingly severe, suppliers without generators \u201ctook a hard knock,\u201d said Bradwin Persent, Aslina\u2019s operations and logistics coordinator, as did many of the country\u2019s struggling small businesses.<\/p>\n\n\n\n
Then, in March, the outages suddenly stopped. Even as the southern hemisphere descended into winter, when electric heaters and early sunsets drive up demand, Eskom, the troubled state-owned utility that generates most of South Africa\u2019s energy, managed to keep the lights on.<\/p>\n\n\n\n
It\u2019s now been seven months and counting since the country\u2019s last blackout. Persent is pleased with the streak but has no plans to get rid of the generator. <\/p>\n\n\n\n
\u201cWe\u2019re happy,\u201d he said, \u201cbut we\u2019re not relaxed.\u201d<\/p>\n\n\n\n
For years, chronic power outages have hobbled South Africa. <\/p>\n\n\n\n
First implemented in 2008, they cost the economy up to R899 million ($52 million) per day, according to central bank estimates, and were a big reason why the ruling African National Congress lost its majority in elections last June. <\/p>\n\n\n\n
Attempts to fix the corruption-gutted utility have failed over the years \u2014 a sweeping privatization plan collapsed; an effort to add generation capacity dragged out and never fully materialized. <\/p>\n\n\n\n
And inside power stations, theft and sabotage became more audacious.<\/p>\n\n\n\n
Now, the situation appears to be stabilizing. <\/p>\n\n\n\n
According to experts, analysts, and officials, the effects of recent and longstanding reforms have radically improved employee morale, which has made all the difference in helping Eskom get back on its feet. <\/p>\n\n\n\n
The decision to delay the retirement of three coal-fired power plants also played a big role.<\/p>\n\n\n\n
That move \u201cbrought confidence,\u201d said Malekutu Bizzah Motubatse, chairperson for the National Union of Mineworkers\u2019 Highveld region, where most of Eskom\u2019s coal plants are located. <\/p>\n\n\n\n
\u201cGovernment has managed to listen to us.\u201d<\/p>\n\n\n\n
Eskom\u2019s recovery started to draw attention in March, when week after week, it passed without blackouts. That happened to be when Dan Marokane took over as the company\u2019s new chief executive. He drew support from labour early on by calling to fix broken power stations and revamp the company\u2019s management structure \u2014 a break from the previous leadership, whose focus had been on the transition from coal.<\/p>\n\n\n\n
Shortly after, the utility announced it would keep the three coal plants open, deferring plans that employees worried would trigger mass layoffs. <\/p>\n\n\n\n
Galvanized by these developments, as well as the return of bonus pay the year prior, workers helped the utility make much-needed repairs. <\/p>\n\n\n\n
That raised generation capacity to the highest levels in four years \u2014 to 67% in July, up from 51% in January \u2014 and secured the longest run without power cuts in five years.<\/p>\n\n\n\n
At the same time, a $14 billion debt relief plan went into effect. <\/p>\n\n\n\n
Across the country, the proliferation of solar panels, a popular alternative to relying on Eskom, eased stress on the grid. <\/p>\n\n\n\n
Coal theft declined as the mineral\u2019s price fell. Power plants were given permission to send parts back to their original manufacturers for repairs, resulting in more reliable operations.<\/p>\n\n\n\n
Efforts to clamp down on crime also paid off. While the government of former President Jacob Zuma plundered the utility\u2019s bank accounts, small-scale sabotage and theft grew rampant at power stations.<\/p>\n\n\n\n
Contractors were known to steal and resell parts multiple times, and thieves would replace entire truckloads of coal with rocks. <\/p>\n\n\n\n
Yet between April and August of this year, a joint effort between the police, national prosecutor\u2019s office, revenue service and a special investigating unit reduced crime by 28% compared to the same period a year prior.<\/p>\n\n\n\n
Law enforcement and the courts’ efforts have produced \u201cphenomenal\u201d results, said Lumkile Mondi, an economist at the University of the Witwatersrand who has written extensively on Eskom.<\/p>\n\n\n\n
Fragile Recovery<\/strong><\/p>\n\n\n\n It\u2019s been a long time since Eskom employees had reason for optimism. <\/p>\n\n\n\n Not only was the company publicly villainized every time the lights went out, but workers were also expected to function under nearly impossible circumstances. <\/p>\n\n\n\n Stations conducting major repairs had parts held up in convoluted processes, performance-related bonuses were suspended for years, and intimidation linked to corruption was common.<\/p>\n\n\n\n During a tour of Eskom\u2019s power stations last year amid record power outages, Electricity Minister Kgosientsho Ramokgopa recognized that employees were simply not being valued. <\/p>\n\n\n\n \u201cBefore you could get to the engineering questions, you could see that there are issues of culture there, such as how people are beaten down and just essentially told they\u2019re incapable,\u201d he recalled during a briefing in Cape Town.<\/p>\n\n\n\n A group of German consultants brought in by the government to assess the situation came to the same conclusion. <\/p>\n\n\n\n \u201cThe current crisis can only be overcome in the power plants,\u201d the VGBE Energy e.V.-led report stated, describing stations manned by unmotivated workers and training programs that were forgotten or neglected.<\/p>\n\n\n\n With working conditions improved and the blackouts at least paused, South Africa\u2019s economy is projected to grow more than 1% this year, which could help reduce the country\u2019s 33.5% unemployment rate \u2014 among the worst globally. <\/p>\n\n\n\n It could also help boost the coalition government that took power this summer after the African National Congress lost its majority.<\/p>\n\n\n\n Analysts have had mixed reactions to the utility\u2019s recovery. Eskom\u2019s performance \u201chas exceeded our expectations,\u201d Raine Adams, an analyst at fund manager Allan Gray, wrote in comments to Bloomberg.<\/p>\n\n\n\n Chiedza Madzima, head of operational risk research for BMI-Fitch Solutions, described the company as \u201cpainting a bright picture for now.\u201d <\/p>\n\n\n\n But, she caveated, the utility isn\u2019t expected to return to pre-pandemic production levels until 2027, and that\u2019s only if it gets robust support from Transnet, a state logistics firm struggling with its own financial and operational problems, and if it manages to lay 14,000 kilometres of transmission line, a prospect she described as \u201cvery improbable.\u201d<\/p>\n\n\n\n Pieter Engelbrecht, the chief executive officer of Shoprite, Africa\u2019s largest grocer, said that the company will continue to limit its reliance on Eskom. <\/p>\n\n\n\n \u201cWe are not stopping in terms of introducing alternatives,\u201d he said. Reliability isn\u2019t the only concern\u2014as the utility\u2019s electricity rates have increased sixfold since 2007, investors and businesses have begun looking elsewhere for more affordable power.<\/p>\n\n\n\n Despite the challenges, Marokane, the new CEO, is looking beyond damage control and towards expansion. <\/p>\n\n\n\n Eskom is currently searching for an executive to head its new clean energy division. <\/p>\n\n\n\n The utility anticipates bringing another 2,500 megawatts online by March, Marokane said, the equivalent of one small\u2014to medium-sized power station.<\/p>\n\n\n\n In the best-case scenario, this could create a virtuous cycle. <\/p>\n\n\n\n Yvonne Mhango, Bloomberg Economics\u2019 Africa economist, noted that an Eskom recovery would help boost the expansion of energy-intensive, job-creating sectors like manufacturing in South Africa.<\/p>\n\n\n\n For now, employees are hopeful, said Motubatse, the union leader. Getting through winter without power cuts for the first time in five years was a triumph, he said, and one that underscored the importance of the coal stations. <\/p>\n\n\n\n Stating his group\u2019s \u201cfull confidence\u201d in Eskom\u2019s board and CEO, he struck a note of optimism. \u201cWe believe that these are the glory days for Eskom.\u201d<\/p>\n\n\n\n
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